Objective, impartial advice for Property Investors and Landlords with a focus on the Edinburgh area

Tuesday, 7 February 2017

41% of all people are renting property in Edinburgh – is this healthy?

Renting used to be a dirty word in the 60‘s and 70‘s.

You either lived in a ‘Rigsby Rising Damp‘ style bedsit with woodchip on the wall and a coin
operated electric meter that buzzed in the night, or you lived in a council
house.

In the latter part of the 20th Century, the British were persuaded that rent payments were
‘wasted money’ so lots of them bought their own home. However, owning often makes less financial
sense and and the rate of home ownership is now reducing as there
is now no stigma at all to renting.

In fact, of the 215,822
households in Edinburgh, 37,121 rent their homes from either the local
authority or a social provider, a further 48,992 rent from private landlords
and 2,374 are lucky enough to live rent free.
This means that, in total, 88,487 households in Edinburgh are rented
meaning that 41% of Edinburgh people are tenants.

The idea of home
ownership is deeply embedded in the British psyche: in fact,
59% of Edinburgh households are owner occupiers (or 127,335) although this
level is lower than across the whole of Scotland where 62% are owner occupier.

Housing is at the heart of Government policy, as John
Swinney has promised to oversee the building of tens of thousands of new properties a year so first-time-buyers can buy
their first home and John Swinney & Philip Hammond between
them have changed the tax laws for buy-to-let landlords in Edinburgh
and across the wider UK.

To get votes, Thatcher (and everyone since) ran election campaigns promising everybody
their own home and, as a country, we seem to equate home
ownership as the main goal of British life. However, there has
been a shift in this prevailing attitude recently.

So as more and more people are renting nowadays, are we turning to a more
European way of living? Well, I believe as a country, we are.

In fact, home ownership could be affecting your health. The UK, according to
Bloomberg, is only the 21st healthiest country in the world.
Germany is at No.10 and Switzerland at No. 4 and home
ownership is at 52.5% and 44% respectively in
those countries— and in the UK and Scotland as a whole
it’s 64.8% and 62% respectively.

In Edinburgh , 75.6 % of homeowners who own their house
outright said they were in ‘very good’ or ‘good’ health whilst, at the other end of the scale,
5.3% said their health was ‘bad’ or ‘very bad’.

Looking at renting, the census splits tenants renting properties in Edinburgh into
two types:

68.9% of Edinburgh local authority/social tenants said they were in ‘very good’
or ‘good’ health and 10.9% were in ‘bad’ or ‘very bad’ health, whilst ‘private rented
tenants’ in Edinburgh were the healthiest, as 90.3% of them described themselves in
‘very good’ or ‘good’ health and only 2.5% were in ‘bad’ or ‘very bad’ health.

I am not suggesting that low home
ownership rates in Switzerland and Germany are
directly linked to health, nor, do I expect Brits to all go to Berlin, Interlaken or
Dusseldorf and realise how happy people are when they don’t need to worry about
all the stresses with accompany home ownership.

The numbers for Edinburgh do go some way to back up the argument and they are
the same across the whole of the UK.

Nonetheless, I do think that substantially all of the upside to home
ownership in recent years has been a function of monumental rising house prices. Edinburgh
landlords have seen this, too.

Now that’s come to an end, it‘s hard to see why anybody would want to buy? Renting is here
to stay in Edinburgh and it‘s growing incrementally each year.

Even with the new tax rules for property landlords in Edinburgh,
buy-to-let is still a viable investment option for most people in the Town.

There has never been a better time to purchase
buy-to-let property in Edinburgh, but buy wisely.

Gone are the days that you would make profit on anything with four walls and a roof. Take
advice, take opinion, do your homework, and speak to property experts in
Edinburgh.

If you would like to explore
how I can help you with your property investments, or should you require any
advice about investing in the Edinburgh property market, wish to enquire about
our Investment Analysis Reports, Property Sourcing, Residential Lettings or
Property Management services, please do not hesitate to contact me on 0131 603
4570 or at news@thekeyplace.co.uk.

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About This Blog

This blog follows the buy to let market in Edinburgh. You'll find tips, guidance, and analysis that relates specifically to Edinburgh and you'll also find properties from all the estate agents in the city on here that may make decent investments.

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Robert Young

I operate The Key Place and if you're thinking of buying a property to let in Edinburgh, I'll be happy to advise or just offer a second opinion. I can be contacted on news@thekeyplace.co.uk, or 0131 603 4570.